Canadian Farmers: This is Our Time

I started planting corn this week and finished today.  In southwestern Ontario we have not had rain in quite some time and the ground conditions we’re very favorable for planting this week especially on heavier ground. I plant corn into a stale seed bed, having worked it the year before. It’s not for everybody but it certainly helps me get a corn crop planted with the minimum amount of labour. Just dropping the planter in the ground and touching the autosteer button is so different from the old days of freezing to death on an open station tractor.

It is a different spring especially when you look at our new crop prices. New crop corn today is about $9 a bushel, soybeans are $18.60 a bushel and new crop weed is $14.61 a bushel.  Those cash prices are in record territory for cash positions this far out from an Ontario harvest. It is a good thing for sure because we’re also having record high prices for farm inputs, which in the spring of 2022 is getting to be a bit of an old story.  You almost wonder how much bad news a market can absorb?

I say that because you know how we got here. Covid created their supply constraints and Vladimir Putin provided the shock to the commodity market that put us where we are today. The only problem is for many farmers catching this fast ride has been an unusual formality. In our dreams we dreamt of corn at $7 and $8 dollars a bushel, but those prices are so far back in the rear-view mirror I can hardly see them. My stratospheric standing market orders for $15 wheat is within breathing distance. The question is, what happens next and how should farmers adapt to this white-hot market?

I don’t know, as I’ve said so many times before but at least today we had a USDA report that continues to show a world, which might be literally starving for agricultural commodities.  The USDA we can expect a US corn crop of 14.46 billion bushels and a soybean crop of 4.64 billion bushels, which is in line with previous reports. Globally wheat production is tightening, with new crop ending stocks of the world’s top eight exporters the lowest in 15 years. The USDA also predicted that old crop soybean stocks are sitting at 235 million bushels, the lowest in six years. The USDA also chimed in in Ukraine saying they’re expecting to export 354 million bushels of corn and 367 million bushels of wheat, a paltry amount compared to usual.

What does this mean to me as a farmer in my field hitting autosteer and trying to fit all the variables together? In some ways it’s like I’m a spectator at a big show. I had one farmer tell me this week he’s not going to sell new crop soybeans for $19 a bushel because he wants $20.  I had another farmer tell me, but he wasn’t getting these good wheat prices because he’d already sold most of his wheat for $8.50.  I’ve had a lot of tremendous standing orders hit as well. I even heard that some of the hardest clay ground in southwestern Ontario was selling for $19,000 an acre.  For the record, there is just a lot going on.

Having said that, some things are the same. I still question the seed monitor telling me there is 35,000 seeds going into the ground, so I get off the tractor and dig some seed up to count.  The clutch that is in the middle of my corn planter always looks to be a potpourri of grease, which continues to be a mystery to me after all of these years. However, that auto steer but button is magic, truly the eighth wonder of the world.

In Brazil this week the Safrinha crop got drier, and this certainly added to the frenetic nature of the corn market. Despite that, the USDA said they saw corn production increases in places like Egypt, Nigeria and Pakistan helping to increase world ending corn stocks to 305.1 million metric tonnes, which is much higher than many analysts expected.   At the same time in hard red winter wheat country in Kansas temperatures were approaching 100 degrees with plenty of wind and no rain. It just added to the fuel in the wheat market. The question is, what happens next week at this time?

I hope to be planting soybeans although I’m expecting a rain front to come into southwestern Ontario on Sunday. Let’s hope that is kind. If there is one thing that I like it is planting soybeans in hot weather. I also don’t like planting them twice or even three times, which I’ve done on occasion. Let’s just say as the weeks go by in 2022, we are getting a peek at the future.  What the future needs is a home run in North American production fields this spring and summer. So far, in my neighborhood, I’ve got that. The key to our future as farmers in 2022 is how it works out for the rest of us this year.  If there’s no home run across the Great American corn belt, all bets are off.  This is our time.